Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

A Fool Looks Back

A growing auction giant and a troubled photography legend were passing ships in the past week.

A growing auction giant and a troubled photography legend were passing ships in the past week. Let's take a closer look.

Why can't we just capitalize the "E" and lowercase the "B"?The world's leading online auctioneer was a highlight during a busy week of earnings reports. And like some of the offerings at its signature site, eBay's (NASDAQ:EBAY) quarter proved to be a mixed bag. On the upside, 29% year-over-year growth in the domestic marketplace was impressive. After a long period of deceleration, eBay marked its second straight quarter of sequential stateside growth in the flagship auction site business.

Quarter

U.S. MarketplaceRevenue Growth

Q1 2004

39%

Q2 2004

32%

Q3 2004

29%

Q4 2004

24%

Q1 2005

20%

Q2 2005

27%

Q3 2005

29%

That's good. That's really good, in fact. However, with its faster-growing PayPal and international auction business increasing over last year's production by just 44% and 43%, respectively, is eBay itself really worth 48 times next year's earnings?

If so, the company is going to have to milk quite a bit out of its head-turning Skype acquisition. Spending as much as $4.1 billion on a communications software giant for freeloaders, eBay had better latch on to any potential synergies before the market starts interpreting the purchase as subtraction through addition.

The potential for greatness is certainly there. eBay is already popular, and if Skype helps to introduce the online transaction process to an old-fashioned audience that prefers to work out fulfillment by talking to a warm voice at the other end of the handshake, eBay's marketplace -- and its value to bidders and listers alike -- will grow.

The company has already proved that it can vanquish auction site pretenders like Overstock.com(NASDAQ:OSTK), Amazon.com(NASDAQ:AMZN), and Yahoo!(NASDAQ:YHOO). Granted, all three of those companies have approached their consumer auction businesses as a secondary outlet, but eBay's mastery of the trade trade has been a beautiful thing to watch. No, the stock isn't cheap, but if eBay is able to catch lightning in a bottle with its new chat software line, a lofty premium will be well-earned.

Eastman called; he wants his name back on the monikerWhat to make of Kodak(NYSE:EK) these days? Earlier this week, I received an email from a photo industry veteran who claimed that Kodak's new high-speed production scanner will revolutionize the industry, overshadowing the Apple(NASDAQ:AAPL) iPod's impact on the mainstream. With the ability to quickly transform a shoebox of ancient photos into digital snaps, maybe Kodak will have something -- at least until the last traditional camera clicker fades away.

Then again, this is also coming at a time when Kodak's stock is hitting rock-bottom, and even the company's attempt this week to sugarcoat its hideous quarter isn't working. Kodak's latest financial report has more red than the eyes in a bad flash photo.

So, sure, let the scanner revolutionize the photo-finishing industry. Let's just hope that Kodak can get the red out along the way, too.

Longtime Fool contributor Rick Munarriz doesn't keep old photos in a shoebox. He doesn't even keep shoes in a shoebox. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

Author

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time with more than 20,000 bylines over those 22 years. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he splits his time living in Miami, Florida and Celebration, Florida.
Follow @market